in Washington, but it was not until the Philippines that I came in close contact with him. And I became very close to [him] and remained so until his death.”48 Together, they organized maneuvers for U.S. and Filipino soldiers, developed an engineering school, and did their best to create a modern Philippine army. Ultimately, both men concluded the Philippines needed many things, new dams being the least important of them.
At the same time, Quezon appeared to have realized the truth about the budget. Through 1937 he reached out to Eisenhower and treated him as an informal presidential adviser, asking his thoughts on everything from “taxes [to] education, honesty in government, and other [policy] subjects.” He “seemed to enjoy” the discussions. “Certainly I did,” recalled Eisenhower.49 While the difficulties with MacArthur remained, Eisenhower’s growing responsibilities and friendships made the work interesting enough that he decided to stay in the Philippines after all.
In many ways, though, his growing involvement in Philippine politics led to the final break with MacArthur. A “group of Filipino legislators,” recalled Clay, “felt that they could turn over [MacArthur’s] job of military advisor to Colonel Eisenhower and save the Philippine government a great deal of money.” Eisenhower earned much less and paid his own rent (unlike MacArthur who lived in the penthouse of the Manila Hotel at government expense). “I know that … Colonel Eisenhower had no part in this, and that he told these Filipino legislators that if they proceeded any further he would just have to ask to be sent home.” But their ideas did not remain secret. When it finally came to “General MacArthur’s attention … he just couldn’t believe that this could have happened … unless it had been instigated by Colonel Eisenhower.”50
While Eisenhower left on a long-deserved vacation, MacArthur demoted him, prohibited him from contact with Quezon, and relegated him to work that kept him away from the National Assembly. Upon his return Eisenhower learned of these new restrictions, and attributed the matter to MacArthur’s jealousy and thin skin. “He’d like to occupy a throne room surrounded by experts in flattery,” he wrote in his journal.51 Recognizing that his career had come to a standstill, Eisenhower once again reached out to Fox Conner, and once again Conner provided. Within a few months, Eisenhower received orders taking him back to the States. Quezon begged him to stay. But at that point, he told Quezon, “No amount of money can make me change my mind.”52
Clay also returned to the States about this time. Congress had approved construction of the Denison Dam along the Red River between Texas and Oklahoma. When completed, it would be the world’s largest rolled earth–filled dam, and something Clay had wanted to work on “for a long, long time.”53 In the summer of 1938, when he learned of the opportunity to build the dam, he jumped at it.54
In retrospect, the saga of Clay, Eisenhower, and MacArthur in Manila reads like so much court intrigue involving men who, in the near future, would hold the fates of millions in their hands. Certainly, the personality conflict revealed a lot about the character of Eisenhower and MacArthur as well as Clay, who managed to become a confidant of both men. But to focus on personality, tempting as it is, masks the important substantive dispute that first brought them into conflict.
For his part, MacArthur revealed an approach to military service driven by a sense of mission and a burning desire for success, and he could take great risks to accomplish that mission. This instinct led him to bravely challenge President Roosevelt’s planned cut of army personnel in 1933, but it led just as easily to his ham-fisted effort to sneak a bigger military budget past Manuel Quezon. At times, his willingness to treat every mission as a pivotal moment in world history reduced him almost to caricature; yet his instinct to succeed at all costs and seek almost apocalyptic tests of his character fit a kind of military ethos and as often as not ended with stunning victories.
By contrast, Eisenhower brought a sensibility to his work deeply attuned to the limits of his environment. He coupled this sensibility with a willingness to consider what military theorists subsequently called “grand strategy”—namely, the use of all the resources available to a nation (economic, moral, political) along with military might—and the way that all resources could be deployed directly or indirectly.55 The eminent nineteenth-century German military theorist Carl von Clausewitz famously argued that “war is merely the continuation of politics by other means.”56 The eminent nineteenth-century German statesman Otto von Bismarck famously noted that “politics is the art of the possible.” Eisenhower absorbed both insights in thinking of war as the art of the possible.
In the postwar years, these two Americans—MacArthur and Eisenhower—would embody contrasting visions of how America should fight the Cold War. Their personal inclinations would result in a political rivalry that would ultimately shape more than their increasingly strained friendship. But in the meantime, while Clay began work on his dam and Eisenhower traveled home, war erupted in Europe. Most Americans wanted to stay free of the conflict, but Roosevelt began to see American entry as inevitable. In foreign policy he tended to gather information informally through anecdote and conversation, assuming this gave him a better sense of a country than he could receive from his own State Department.57 His feelings toward Japan proved a telling example. While Roosevelt attended Harvard in 1902, a Japanese student showed him a map outlining a twelve-step plan for annexing Korea, Manchuria, Australia, and New Zealand, and eventually all Asian people. Roosevelt related the story years later, as if to show that he learned more in one afternoon than what his own state department had discovered through the decade of the 1930s.58
In June 1940, he surprised many by announcing a shakeup in both the Navy and War Departments. The Republican Frank Knox would become secretary of the navy. Roosevelt then turned to another Republican, Henry Stimson to become the secretary of war for the second time. Stimson had just turned seventy-two and with Roosevelt in office assumed he had finished his public career. Yet here he was, again, in the executive branch—working for a Democrat, no less. Roosevelt made the appointments “in behalf of national defense” and as a means to create “national solidarity in a time of world crisis.”59 Americans generally liked the approach: over 70 percent approved Stimson’s appointment in a Gallup poll taken just after his nomination.60
Chapter 4
The Army, the New Deal, and the Planning for the Postwar
Because of their duties in the Philippines and later in World War II, MacArthur, Eisenhower, and Clay missed what came to be called the Keynesian Revolution. In 1936, John Maynard Keynes wrote The General Theory of Employment, Interest and Money.1 Prior to Keynes, most economists saw savings as the key to economic growth, where the more parsimoniously a people lived, the wealthier they would become. As Adam Smith argued, “Whatever a person saves from his revenue he adds to his capital.” What was true for one proved true for all: “As the capital of an individual can be increased only by what he saves … so the capital of society … can be increased in the same manner.”2 In short, savings did not disappear from the economy; they made economic growth possible.
Among the many arguments in his enigmatic book, Keynes reversed Smith’s argument by pressing precisely on the question of what happened to savings.3 Nothing guaranteed their automatic conversion into investment Keynes believed. Entrepreneurs invested based on the expectations of future profits. If, for some reason (Keynes posited “animal spirits”), they lost confidence in the future, they would hold their money rather than invest. “With the separation between ownership and management which prevails to-day,” he explained, “and with the development of organised investment markets, a new factor of great importance has entered in.” A well-developed and efficient financial system “sometimes facilitates investment,” but just as often, it “adds greatly to the instability of the system.”4 In short, the creation of
